The Foreign Investment Climate in China: Present Challenges and Potential Reform

Throughout 2014, foreign companies across the United States, Europe, and Asia have issued a growing number of complaints with regard to the operating environment in China. Some of their concerns, like stiffer competition from Chinese companies and rising labor costs, are rooted in China’s slowing economic growth. Perhaps more distressing are recent complaints from foreign businesses with regard to their treatment by Chinese regulators. As reported by numerous business groups this year, their concerns range from increased scrutiny and regulatory enforcement to procedural and due process shortcomings. Some foreign companies worry that increased Chinese regulatory activities have seemed to focus disproportionately on foreign investors, putting them at a disadvantage compared to domestic firms. Today’s hearing will seek to assess the most recent and pressing challenges facing foreign firms operating in China with a spotlight on China’s Anti-Monopoly Law enforcement. This hearing will also seek to evaluate the potential for China’s planned reforms to create a more transparent, cooperative, and fair environment for foreign investors.